Southern California -- this just in

Rizzo tries again to make $2-million bail; D.A. says the money is tainted

October 4, 2010 | 2:30
pm

Former Bell City Administrator Robert Rizzo will make a second attempt to make bail this week, but his effort is facing renewed opposition from prosecutors who say that some of the assets he's offering are tainted.

Rizzo lists four properties that he says he will use as collateral to post his $2-million bond. The properties, located in Torrance and Los Angeles, are owned by a friend of Rizzo's wife and his mother-in-law, Su Lin Chen Chiang.

In the court papers, Rizzo's attorney, James Spertus, cited an insurance analysis that values the properties at a combined amount of $2.3 million. However, prosecutors question whether the estimates are accurate, arguing that there is insufficient documentation concerning their current market value.

Prosecutors say they have also uncovered evidence that Rizzo's mother-in-law was involved in a separate real estate deal with former Bell Deputy City Administrator Angela Spaccia. Like Rizzo, Spaccia was arrested in a broad public-corruption case.

Prosecutors said a promissory note found during a search of Rizzo's property detailed Spaccia's agreement to pay Chiang 7.25% interest on a $200,000 note.

Spaccia had no means to make those payments other than public funds that she and Rizzo are accused of illegally disbursing to themselves, said Deputy Dist. Atty. Max Huntsman. Rizzo, Spaccia and six other current and former Bell city leaders were arrested last month and are facing charges that they illegally raided the city's treasury to award themselves exorbitant salaries and pensions.

Spaccia's promissory note to Chiang shows that "this is a tangled web of city money and personal finances,'' Huntsman said.

The seized documents also reveal an attempt by Spaccia and Chiang to commit tax evasion, with Spaccia promising not to report the interest income to the IRS, the prosecutor said.

"Mr. Rizzo has tainted his mother-in-law as a source of bail,'' Huntsman said.

The bail hearing in Rizzo's case is set for 1:30 p.m. Wednesday. His first application was rejected.